Economic Development, Human Resources, and Manufacturing

Economist predicts about 5,000 net new jobs for region in 2013

December 13, 2012
| By Pete Daly |
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If everybody would just buy a new car . . .

George Erickcek returned to that theme several times this morning in making his annual forecast of what the economy in the Grand Rapids/Wyoming Metropolitan Statistical Area will do in 2013. His end-of-year forecast is sponsored by The Right Place at the Amway Grand Plaza every year in December.

Erickcek, senior regional analyst at the W. E. Upjohn Institute for Employment Research in Kalamazoo, noted that in 2012, there were 5,000 net new jobs added to this region. In 2013, he said, he expects “similar” job growth, “maybe a bit higher.”

In 2012, the percentage change in jobs overall was 1 percent over the prior year. Erickcek expects growth of 1.2 percent through 2013 and 1.6 percent in 2014.

Looking at the different sectors, he sees goods producing jobs growth slowing down next year. The change in 2012 was a 1.3 percent increase; 2013 is predicted at 1.1 percent and the same for 2014. In the service-providing jobs sector, 2012 growth was 1.4 percent, with Erickcek predicting 1.5 percent in 2013 and 1.8 percent in 2014. In government employment, jobs here went down by 2.4 percent in 2012 and are estimated to decline another 0.9 percent in 2013.

Economic growth “is powered by manufacturing,” he said, and in West Michigan, that means auto-production suppliers. Job growth in the manufacturing sector here will be “slower than what everyone would want to see.”

“We are noticing (jobs in) the service sector are also expected to grow” even faster, said Erickcek, which he attributes to the “spin-off” effect of increasing manufacturing employment.

His focus on sales of new cars isn’t really a joke. Economists believe manufacturing has the highest multiplier effect in the economy, compared to other types of work. There are an estimated 1.7 other new jobs created for each new job in manufacturing.

“Michigan is being powered by manufacturing,” said Erickcek.

Throughout Michigan, from September 2011 through September this year, the construction, retail, educational services and government employment job sectors declined — retail with the most at almost 8 percent. Professional/business services showed the largest increase at over 20 percent, with statewide manufacturing up by about 18 percent.

Erickcek said that data, however, does not count temporary manufacturing workers in manufacturing; they are counted among professional/business services.

Indicators of future activity are:

  • Business reports are generally upbeat.
  • Google search requests for employment and public assistance are down.
  • The GVSU Purchasing Managers index is softening, and BIFMA has revised its forecast for 2013 downward.

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